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Gas prices on the rise, but why?

March 27, 2012
Daily Press

EDITOR:

When gas prices rise so do the costs of food and energy reducing household discretionary spending and making it harder to make ends meet.

Economists would have us believe that it is a function of supply and demand yet, demand in the US is down.

As for supply, the US has recoverable reserves of about 1.4 trillion barrels located in places like the tar sands of Utah and shale deposits in other states, the Outer Continental Shelf, and Alaska's North Slope to name a few.

The current administration and Congress frown on developing these resources favoring instead pumping millions of taxpayer dollars into alternative energy like solar and wind, however, with China controlling 95 percent of the rare earth metals needed in these industries it amounts to payback for political support.

The media talks of fears of turmoil in the Middle East and elsewhere, but the U.S., Russia, Israel and other nations support dictators and terrorism to worry oil markets and drive up the price of oil.

Drawing on our Strategic Petroleum Reserves would only be a re-election ploy as no emergency exists.

There are many ways to reduce the price of gas at the pump.

For example, we can remove the ethanol from gasoline as it produces only 61 percent of the energy of gasoline, causes poor mileage, emits more carbon dioxide, and it forces refineries to pay millions for cellulosic ethanol waivers although there is not cellulosic ethanol production.

We could do away with many of the oppressive EPA regulations like blend requirements that add extra costs to refineries, amend the Jones Act to allow US ships to deliver to US ports, and complete the Keystone XL pipeline, which would increase supply and lower transportation costs as Canadian crude is $74 a barrel compared to Gulf and European at about $122 a barrel.

Will we run out of oil? I don't think so as the earth is constantly producing new oil.

This is evidenced by the fields in the Gulf that replenish themselves, and Russian technology in the 70's showed that there are oil streams at 40,000 feet.

I believe that high gas prices are the result of the failure of Congress to regulate Wall Street, which bets on higher oil prices in the future.

Gas prices are affected mostly by the global price of crude oil. It is not a function of the cost of production or of supply and demand.

It is the degree to which commodity speculators drive up the prices to make huge profits and how much profit oil companies want to make.

Change will come when we support representatives who work for the people and the nation, not finance and industry, or their own self-interest.

Ralph Zierk

Rapid River

 
 

 

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